Astros’ Luhnow on rebuild, minor league pipeline, major league value

Luhnow on his blueprint to rebuild the Astros: The key asset that we need to acquire is young, talented players with big major league upside. We have some of those in our organization right now. We had some last year when we took over. [Delino] DeShields, [George] Springer, [Jonathan] Singleton were players that were all here; [Mike] Foltynewicz, [Vincent] Velasquez continue to progress. We added as many as we could through the draft and the trade deadline last year. So there’s an element of it.

Major league value, that’s the objective, that’s what we’re trying to produce. And the way you produce that is, you acquire these assets – whether it’s through the draft or through trades – that have the possibility of becoming that. And then you need to set up a system so you can constantly acquire these things as well or better than your competition. So what does that mean? It means having good scouts and good processes for identifying the universe of talent that’s out there that you might bring in. Being good at negotiating and doing the right deals to get it in. And then having the right pieces to help build it, because you bring in – for me, it’s a manufacturing analogy.

If you’re bringing in – we’re spending, let’s call it $20 million a year of bringing in raw material into this player development pipeline. And so anytime in the pipeline, let’s say you’ve got $80 million worth of assets that are going through the pipeline at any point in time, and how much is the value of what is coming out the other end? Hopefully you’re getting three to four pre-arbitration players a year that are way better than what you be paying them, which is the minimum [salary]. So that surplus is what you’d be getting from your pipeline. And that’s got to be a big number to justify all these expenses. And the way you get that number to be big is you’re good at bringing in the raw material. You’re spending $20 [million], but you’re really getting $25 [million] worth. Then you’re taking the 25 and you’re turning it into 50 as it goes through the pipeline. And then you’re producing it at the other end.

A lot of what we did this year is, we laid the foundation. And it takes years to lay the right foundation. It’s like building a house. You want to make sure you don’t have [fuel] tanks underneath the ground, that your foundation isn’t cracked. That you’ve got the right foundation, so that as you build on top of it, you can sustain a lot of growth on top of it. And that’s really what we’re doing at all the levels. There is not a department that we haven’t looked at and said, ‘OK. How would we start this department? If we were to start this department from scratch, how would we do it? What does the current department look like? Given that this is what the current department looks like, what pieces do we want to retain? How do we want to modify what’s there? And how do we want to add to it so it looks a lot more like our ideal model than maybe what was there.’ In some departments it was close and in others it was pretty far away. We’re still in the process of going through that area by area, but I think we feel pretty good at where we are right now, relative to where we were 10 months ago – with the idea that there’s still a lot of work to be done.

… For me, there’s a lot of ideas from the business world like continuous improvement. We can never rest on our laurels. We know what the objective is – it’s pretty clear: to create as much major league value through our pipeline as possible, then be smart about adding to it in the free agency market and through trades. But what are the key components of the entire business system that are going to drive value for us relative to our competition?

… We are in a zero-sum game at the end of the day. A win for us is a loss for someone else. There’s certain things where the industry gets smarter and better as a whole. But we’re still competing with one another on a daily basis, so our advantage needs to come at someone else’s disadvantage. So we’re always looking to gain an edge. And it’s not just in one area. You can gain an edge in 50 different areas that add up to a meaningful edge. And in some you’re going to have a deficiency because of your market or your current situation.

You compare our roster to the [Texas] Rangers, we’re not there yet. But will we be in five years? I hope so. Will our payroll be up in the range where it can compete with the Rangers? I hope so. But for now, we’re not even close. So we know we have our work cut out for us. I think what’ll be fun for our fans is to experience the cycle on the way up. Our fans have gone through the painful experience of the cycle on the way down, from the World Series in 2005 to basically two 100-loss seasons in a row. This is as far down as it goes. From here, going forward, it goes up.

And now the question is, does it go up – what’s the rate at which it goes up and then how sustainable is it once it gets there? And we’re very sensitive to both of those issues. We understand that the rate it gets better is very important for our fans. But we also understand if you increase that rate at the expense of being able to sustain it, that’s a big problem. We want to increase it as fast as we can without compromising the ability to sustain it once we get there. And a lot of that is the work we’re doing in setting up the foundation and the infrastructure. I look back and – I’m a competitive person, Jim [Crane’s] a competitive person, George [Postolos] is a competitive person. I look back at this last year and I don’t judge what we did based off the number of wins we got at the major league level. Clearly nobody likes to lose and I would’ve much preferred to win an extra 10, 20, 30 games. But I think we had a winning year in 2012 because of the improvement we made in laying the foundation for the future, and I don’t think there’s a whole lot we could’ve done better. Of course, you always critique yourself. But I don’t think there’s a whole lot we could’ve done to put ourselves in a better situation as we go forward. And so from that standpoint, I think 2012 was a positive season, despite the fact that we had a losing record at the big league level. Hopefully what we did is, we traded off a certain number of wins in 2012 for a much larger group of wins in as soon as 2013.

I do want this team to win a lot more games next year; I expect we’re going to win more games next year. Our whole strategy at the big league level is going to be about winning more games. But leveraging the momentum that is coming through the system; leveraging the systems that we’re putting in place to ultimately achieve sustained success. And so are we going to go out and sign a free agent that’s going to play and contribute at the major league level? Probably not. Now, we have some flexibility. We’ve got some outfield spots, we’ve got some pitching spots, we’ve got some bullpen spots – there’s places to plug in players that are major league value right now that we feel we’re going to go look at. But by and large – for instance, [Monday] we went through the roster – I feel pretty good that even if we don’t go out and sign free agents, we have a team that’s going to be better next year. There are a lot of young players that are going to be more experienced next year. We’re going to have a really good coaching staff – a coaching staff that’s designed around them to help them get better. And we have more help coming on the farm. Even without a big free-agent splash, I think we’re going to improve. Is it going to be enough to satisfy our fans and get them excited? Probably not. Which is why we’re probably going to look at every opportunity we can to improve the product on the field and maybe get a few veteran players who can also accelerate the development of the younger players. That’s critical. Because oftentimes, it’s the guy you watch who’s done it and been there, and you watch the way he works and you watch the way he goes about everything, and you model yourself after that player. Whereas, when you have a team filled with 25-year-olds, it only takes one or two bad apples to set the whole thing off in the wrong direction, and there needs to be someone to check those guys.

Now, I think our staff is going to do a lot better job and I think that’s where a lot of Bo [Porter’s] strengths come into play. No one’s going to – I think discipline is going to be pretty good in the Bo Porter environment. Because he’s going to have high expectations, he’s going to be very clear about what he wants and how it needs to be done. And he’s also going to be very proactive in disciplining players who aren’t performing to his expectations. That’s what we need. That’s what a young team needs. It has to be done in a way where veterans can slide in there and also provide a little leadership and not feel like they’re back in kindergarten. They need to feel like they’re being treated like adults as well.